Post on 22-Jul-2015
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Strategies for Full Employment in India
Uncommon Opportunities: Roadmap for Employment, Food & Global Security
November 21, 2004
International Center for Peace & Development, USAThe Mother’s Service Society, Pondicherry
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Unemployment
1993-94 20M 1999-00 27M Twice as high for lower consumption classes On daily basis 35M Youth Unemployment 13%
Kerala 35%
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Natural Employment Generation
New entrants to labour force ` 7-8M/yr
Urban migration 1M/yr
Agriculture employment is flat
Less growth in unemployment -1M/yr
Natural job generation 7-8M/yr
The absence of social unrest and the fact that urban migration continues and urban unemployment does not rise enormously indicate the surpluses are being absorbed.
This is unorganized, unconscious process akin to education without schools
Make the unconscious process CONSCIOUS
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How society stimulates employment
New products New services Growth in demand Technological innovation Higher quality &/or productivity Organizational innovation Higher skills Better access to information Increased speed Legislation & law enforcement Administrative responsiveness Environment/health consciousness Change of attitudes
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Three Approaches to Employment Generation
Expand existing activities Nursery schools, tutorial institutes, English teaching
Borrow from other countries Credit rating & collection agencies Trade shows & network marketing Health clinics
Promote culturally compatible activities STD & chit funds Marriage halls Mini-power plants Rural information centres Contract farming agencies
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Available Modes of Action
Increase access to credit Provide incentives for new initiatives Strengthen or enforce legislation Impart training Use insurance as a stimulus Publicize opportunities in the media
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Where are the untapped potentials
Raise farm productivity Renewable energy Agro-industrial linkages Service sector Employable skills Application of IT
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Prosperity 2000 Strategy
Agriculture as engine for industrialization & employment growth
Shift focus from meeting minimum production needs to maximumizing profit
per unit land & water
Projecting market growth based on nutritional requirements
Raise productivity of soil & water
Shift to commercial crops which absorb more labour
Develop industry linkages with industries
Create 4.5 million direct & 5.5 million indirect employment opportunities per
annum
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India’s Crop Productivity Gap (kg/ha)
Crop USA China India
Maize 8900 4900 2100
Paddy 7500 6000 3000
Soy beans 2250 1740 1050
Seed Cotton 2060 3500 750
Tomato 6250 2400 1430
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Low farm productivity results in
High unit cost of production
High priced food
Low farm incomes & purchasing power
Low labour absorption
High water consumption/unit of produce
Limited export potential & threat from imports
(e.g. cotton)
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Technology Strategies
Raise crop yields
Raise water productivity
Improve post-harvest storage & transport
Expand & upgrade processing industries
Raising productivity can create millions of on-farm and
off-farm employment opportunities.
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Horticulture
Labour content 6 times cereals
Generates 10-30 times earning / unit area
Filling India’s nutritional gap requires 40% growth
Add 4M ha horticulture to raise production 40%
Generate 8 million jobs
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Food Processing
Improve storage & processing to reduce Rs 70,000 crores in
crop losses
Global share of processed food exports is rising
India processes only 2% fruits & vegetables vs. Thailand 30%,
Brazil 70%, Philippines & Malaysia 78-80%)
India projected to process 10% fruit & veg by 2010
Industry directly employs 1.6M
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Power Demand to Triple by 2020
0
200
400
600
800
1000
1200
1400
Industry Transport Agriculture Commercial Residential Total
1997 BAU 2020 BCS 2020
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Oil Demand to Triple by 2020
0 50 100 150 200 250
Power
Industry
Transport
Agriculture
Commercial
Domestic
Total
Projected demand for oil in million tonnes
1997 BAU 2020 BCS 2020
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Cotton & Textile Industry
India is 3rd largest producer of cotton
Domestic demand projected to grow 70% by 2010
Export demand projected to triple by 2010
Double productivity of cotton
Double area under irrigated cotton
12 million additional jobs in textile industry
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Forestry, Herbs, Medicinal Plants
100 M rely on forests for main source of
livelihood, including half of India’s 70M tribals
Objective to raise forest cover 50% in 10 ys
Introduce corporate contract farming with bonded
performance guarantees & assured employment
for local population
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Fisheries World seafood market doubled in the 1990s
India’s marine & inland fisheries employ 6M
1/3rd of India’s marine fishery potential untapped
China full-time employment in rural aquaculture
1989 – 1.5M
1997 – 3.3M
Shrimp farming -- 4 direct & 4 indirect jobs per ha
1999 – 161,000 ha generates employment for 1.3M
Additional 120,000 ha would create 1M jobs
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Dairy Rs 100,000 crores by 2005
India is largest and lowest cost producer
70M dairy farmers
Cooperatives provide employment for 11M
families
Potential for 42M jobs
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Employment Potential -- summaryCrop productivity growth 5,000,000
Horticulure 8,000,000
Biomass power & bio-fuels 21,000,000
Agro-forestry 6,000,000
Cotton & Textiles 12,000,000
Dairy, animal husbandry, fisheries 8,000,000
Total 60,000,000
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Organization for Rural Prosperity
Self Help Groups
Contract Farming
Rural Information Centers
Farm Schools
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Self Help Groups
1 million created in 3 years
15 million members benefit
90%+ repayment of loans
Mostly for non-farm activities
Commodity-wise SHGs for agriculture
Appachi Foundation & ICICI – 60 SHGs for cotton
growers in Tamil Nadu
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Contract Farming
Successful Indian model -- sugar mills
Organize SHGs of farmers
Role of the Contractor Provide quality inputs Arrange credit with banks Arrange crop insurance Deliver extension services Tie-up market with industry Operate farm schools
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Farm Schools cum Extension
Objective: double farm yields in 3 years Lead farmers act as paid field training &
extension staff for the contractor Lead farmers run Farm Schools on village lands Demonstrate methods on farmers’ lands Train farmers & disseminates information Operate or link to Village Information Centre Link to soil test labs Link to agro-service centres
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Rural IT Knowledge Centres
Mission 2007 – 500,000 village centres Can create 5 jobs per centre Can charge for services
Soil analysis -- expert system for advice Multi-media farm training Input supply information Market information Educational information Health information E-government services Other vocational training
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Ag Enterprises -- Policy Issues
On-farm training system
Enforce sanctity of contracts
Expand access to credit through SHGs with group guarantees & post-
dated checks, including present defaulters.
Extend powers of Revenue Recovery Act to ensure repayment by SHGs.
Tax credits for contractors who raise farm productivity
Strengthen crop insurance program
Penalties for false documentation by officials
Penalties for adulteration of ag inputs
Railways to provide refrigerated storage & transport
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Service Sector
USA: provides 80% of jobs
India:
Grew by 60M jobs in 18 yrs
Rose from 25% to 32% of total employment
High potential fields Tourism Transport, storage, communication Education Health care Financial services Internet-based activities
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Internet-based Self-Employment
Desktop publishing Web design Web research E-books Translation Technical writing Engineering & technical services
Opportunities from Rs 5000 to 1 lakh per month
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Vocational Skills
50% of firms in developing and industrialized
countries report severe shortage of skilled workers.
India’s problem is not lack of employment
opportunities but lack of employable skills.
Skills create employment and self-employment
opportunities.
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Vocational Skills Gap
Only 5% of India’s workforce (20-24 years) have
vocational training compared with 28% in Mexico and
96% in Korea.
By 2010 major labour shortages will emerge in the
industrialized nations forcing movement of both
manufacturing & service jobs to wherever the skills
are best.
Upgrading skills essential to tap global markets
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Vocational Training in India
4200 ITIs 1,654 government run 2,620 private
Courses offered 43 engineering & 24 non-engineering trades
Capacity – 6.3 lakhs
State enterprise programmes – 1.7 lakh
Including agriculture & other – 20 lakh
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Vocational Training Deficit
Students completing 8th-9th standard 300 lakhs
Students entering 10th-11th 150 lakhs
New entrants to workforce (per year) 70 lakhs
Vocational training in engineering, agriculture & other fields
20 lakhs
New entrants to workforce w/o training 50 lakhs
Existing unemployed youth (15-29) of which 80% are educated up to 10th
150 lakhs
Existing workers to be trained to raise non-ag skilled portion to 25%
350 lakhs
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Three Models
Farm Schools in every revenue village
Vocational Schools
Computerized & Televised Vocational Training
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Vocational Schools
Promote vocational institutes at block and district level 5000 govt 50,000 private
Conduct exams for every skill as for drivers licenses
Certify approved training centres, e.g. BPO
Provide scholarships & incentives for trainees
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Computer-based learning is twice as fast @ half the cost
Multimedia Interactive Immediate Feedback Self-paced learning Eliminates need for trained teachers Responds rapidly to changing skill needs Uniform testing
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Computerized Vocational Training
Establish 1 lakh CVT Institutes like internet cafes 50,000 in private sector 50,000 training centres at engineering and arts
colleges, ITIs, polytechs, high schools, NGOs, etc.
Partnership with industry to develop multimedia training software
Provide training to a minumum of 4 million students per annum
Government certification of courses Generate self-employment opportunities for 50,000
entrepreneurs
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Multimedia vocational courses
RWH Child care Nutritionist
Selling skills Real estate Law clerk
Telemarketing Insurance agent Quality manager
Catering Video editing Furniture design
Farm mgmt Pharma rep Textile design
Reporter Dry cleaning Electrical repair
Travel agent Internet research Graphic design
Bookkeeper Organic farming Interior design
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CVT Job Shops
Privately owned, self-employment
Each centre with 1 to 10 computers
Stocked with a library of training software
Training material on CD-Rom format
Fees based on an hourly rate
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CVT Job Shop: Assumptions
Three computers per Job Shop 20 training programmes per Job Shop Each computer utilized 300 hours per mo Operating expenses for rent, two paid
employees, phone, electricity may range from Rs 15,000 to 20,000 per month
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CVT Job Shop: Economics
Capital investment Rs 1.5 lakh.
Cost of operations per computer hour = Rs 20 / hour.
Cost of amortising of computers and software over two
years = Rs 14 per hour
Average cost of training = Rs 35 per hour
Average retail price of training = Rs 50 per hour
Net profit = Rs 15 per hour or Rs 1.5 lakhs / yr
50 hours of computerized vocational training, equivalent to
about 250 hours of classroom training, would cost the
student only Rs 2500.
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Training Software: Economics
Cost Rs 50 lakhs per course
Retail price Rs 1000 per set
Sale of 10,000 sets generates Rs 50 lakhs profit
Offer 50% government subsidy for development
of approved courses
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CVT Action Plan
1. Delivery CVT through all state-owned engineering colleges, ITIs, Polytechnics, liberal arts colleges, high schools, other institutions.
2. Provide financial assistance/ incentives under Central Government self-employment schemes to promote private training institutes.
3. Encourage financial institutions to provide loans to entrepreneurs.
4. Negotiate with computer software companies to develop a wide range of vocational training courses.
5. Recognized institutional authorities to certify course contents.
6. Finance bulk purchase of approved training software with 50% subsidy to minimize the cost of training.
7. Train entrepreneurs to set up/manage private institutes.
8. Provide scholarships to low income youth to cover training fees.
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IT Incubator Business Parks
Computerised vocation training Computerised tuitions institutes Computerised language training Software training Video-conferencing services High speed data transfer services Web, graphic and animation design services Computer repair and maintenance services International Internet telephony Computer hardware parts manufacturing and assembly Customer and technical support call centres Back office processing Medical transcription Digital photography, scanning and image processing Internet research services Accounting services Computerized testing laboratories
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Who creates enterprises?
Skilled experienced workers leaving existing jobs create enterprises Machinists taxi drivers hotel servers bus cleaners Printers tailors
Do entrepreneurial training programmes work?
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Promoting Entrepreneurship
Extend bank credit & seed capital to employees
with 5 years experience
Require training & certification for new enterprises
to reduce failure rate
Existing entrepreneur to sign as guarantor
Insurance companies can ensure loans based on
qualifications
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Issues for Study
Natural job creation How many jobs are being created? In which sectors & fields? By what process? How can the natural process be magnified and accelerated? How are rural migrants absorbed in the cities?
Occupational demand Identify high growth occupational categories at all levels Measure growth in pay/income levels by category
Emerging Activities Identify emerging occupations in all sectors,
Farm managers & Soil technicians Servicing for cell phones, ACs, computers, VCDs, etc. Home delivery, floor cleaner, masseuse
Skills for national development Compile a complete list of skills needed for India’s development to next higher level
Job creation in other countries Study which job categories grew rapidly in US during a comparable period?
Efficacy of Entrepreneurial Development Programmes